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When Bitcoin and other cryptocurrencies first emerged, and the potential surrounding them was still somewhat unclear, many crypto enthusiasts looking to seize the opportunity simply implemented trading strategies that were known to be successful in the traditional markets and hoped they would be as lucrative in the crypto markets as well.
As cryptocurrencies continue to gain popularity and pierce their way into the heart of the mainstream, the crypto markets evolve as well, and traders must keep up with the pace. While this dynamic presents itself in many different forms, arguably the most dramatic way trading strategies have evolved in recent years is the surge in the adoption and use of advanced automated trading tools.
Crypto trading bots, specifically, and automation in general, enable traders to adapt classic trading methods to the unique conditions of the crypto markets, transforming their inherited risks into promising opportunities.
One near-perfect example of the power of automation turning a downside into an upside is the need for traders to adapt classic strategies to much more intense trading hours. In traditional markets, the schedule is structured as five days a week, eight hours a day, with some holidays off. Crypto markets possess a much more intense trading routine of 24 hours a day, seven days a week, and almost no exceptions.
With auto crypto trading tools, crypto traders can follow and execute their trading strategy round-the-clock, which could lead to better overall results. This winning combo of active 24/7 trading bots and non-existent end-of-day gaps enables traders to design strategies with better risk-reward ratios. It offers more potential upside but with the same or less downside.
A great case study to demonstrate the disruptive force that automation has on crypto can be found in the evolution of the dollar-cost-averaging trading method.
Traditionally, traders who wanted to implement the DCA strategy had to do it manually. Later, as automation technologies progressed, traders could set up a DCA strategy to work according to time-based intervals, which might be better but still quite far from ideal. Nowadays, an advanced DCA bot can enable traders to optimize the execution of the DCA trading method by utilizing a variety of indicators and, most importantly, technical analysis. This allows traders to implement this classic trading method in new lucrative ways, according to the actual price action in the markets.
This evolution of DCA trading is just one example of how once-useful automation tools are now becoming essential. With the help of crypto trading bots and other automated tools, crypto traders can optimize classic trading strategies and develop new trading schemes. By designing or modifying strategies, monitoring the markets, diversifying portfolios, and managing positions, automation gives traders a whole new set of tools to take their trading to the next level.
As technology advances, automated trading tools are expected to continue supporting the development and execution of new trading strategies and methods, enabling active crypto traders to navigate the markets with unparalleled success.
To sum up, the world of crypto trading has experienced and is still experiencing some major shifts since its early days of inception. Due to its massive adoption and undeniable advantages, it’s safe to assume that auto crypto trading is one of the most dominant factors enabling retail crypto traders to step up their trading skills into professional territory.
So, if you are a crypto enthusiast looking to master the crypto markets, there is no better way to start your trading journey than by exploring the endless possibilities and potential that can be achieved through the power of automation.
*This article was paid for. Cryptonomist did not write the article or test the platform.